The Co-op Bank and its advisers have been approached by outside investors interested in taking a stake in the troubled lender as it attempts to raise £400m in a race to prevent its capital falling below the minimum level allowed by regulators.

Niall Booker, chief executive of the Co-op Bank, said he and the company’s adviser, UBS, had fielded calls from a range of potential new shareholders in the business, which yesterday reported a £1.3bn loss for last year.

“I have personally have had inquiries from people who are not investors today who are interested in investing in the bank, as have UBS. So yes, there is interest,” said Mr Booker speaking to The Telegraph.

Mr Booker declined to elaborate on the current state of the talks and the name of the potential buyers but added “these are not retail investors”.

One source with knowledge of the talks, said the interest came mainly from so-called special situations funds, as well as from traditional long-only investment funds. "This is not just a bunch of hedge funds," said the source.

The Co-op Group last year ceded control of the bank after the discovery of a £1.5bn black hole in its balance sheet that led to a debt-for-equity swap leaving it with a 30pc holding. The mutual has yet to confirm whether it will support the new cash call.

Bondholders who received shares in the bank last year, including several US hedge funds, are said to be supportive and could also buy some or all of the Co-op allocation of the rights should it not take part.

Without the £400m the Co-op Bank will likely breach the minimum 7pc core equity Tier 1 capital ratio. In its annual report, the lender said: “The completion of this transaction is a material uncertainty as to the going concern status of the bank.”

To maintain its holding, the Co-op Group would need to invest a further £120m on top of the £333m it has already pledged in support to the lender. So far, the Co-op has provided £70m of these funds and is required to hand over a further £263m.

The Co-op Bank’s announcement of a loss of £1.3bn for 2013 came as it warned it was unlikely to make a profit either this year or next.

Its latest loss was driven by a combination of credit impairments in its toxic loan book of £516m, compensation and legal costs of £412m, as well as a £148m writedown against the value of an abandoned IT overhaul project.

Just under £5m of deferred bonuses owed to former directors and senior managers of the bank are being withheld in the wake of the new loss, though the lender is likely to face new controversy over its pay after revealing that Mr Booker would earn £4.6m for his first 18 months as chief executive.

Mr Booker’s pay consists of a salary of £669,000, a monthly allowance of £140,000 paid so long as the bank is not in breach of the UK’s minimum capital standard, £111,000 in pension contributions, and £10,000 of taxable benefits, such as company car and healthcare services.

On top of this, he has also been granted a long-term incentive award potentially worth as much as £1.2m.

Mr Booker said he recognised that his pay would be “a number that some people feel strongly about”, but insisted it was had been “contractually agreed” when he was brought in after the discovery of the bank’s problems to turn around the business.

He added, that he was unlikely to be at the bank for a long time and that conversation about he would probably begin discussing his departure in the middle of next year.

“Once survivability is ensured then obviously I and the board recognise that whatever skill set I might have is no longer required by the bank and it would more suit someone used to running a business in steady state… someone who will cost a wee or a great bit less,” he said.